Accounts Receivable

Parent term

Accounts Receivables (AR), also known as credits receivable or trade receivables, is the amount that the company is owed for its provided goods or services. AR is the proceeds or payment from its customers, treated as current assets on the balance sheet. The amount depending on the line of credit, the credit period ranges from a few days to months, or in some cases maybe a year. Many businesses use accounts receivable aging schedules to keep taps on the status and well-being of AR accounts, and the strength of a company’s accounts receivable can be analyzed using the accounts receivable turnover ratio or days sales outstanding.